Khula Retail — Funding Request & Use of Proceeds
The R4.6 million funding request, the blended capital structure, and the detailed use of proceeds across fit-out, inventory, working capital and launch.
Section 12 · Business Plan
Funding Request & Use of Proceeds
The R4.6 million funding request, the blended capital structure, and the detailed use of proceeds across fit-out, inventory, working capital and launch.
12.1 Capital Required
Khula Retail (Pty) Ltd is seeking total start-up capital of R4.6
million, comprising R2.5 million in equity (founder + strategic partner)
and R2.1 million in senior debt and asset finance. Of this total, R1.5
million is already committed by the founders in cash and capitalised
pre-incorporation expenses, leaving R3.1 million to be raised through
this funding round.
12.2 Detailed Use of Proceeds
| Use of Funds | Amount (R) | % of Total | Notes |
|---|---|---|---|
| Store fit-out & equipment | 1 350 000 | 29.4% | Shelving, refrigeration, deli/bakery, signage |
| Initial inventory | 1 800 000 | 39.1% | Opening stock at cost; ~38 days of cover |
| Working capital reserve | 750 000 | 16.3% | Buffer to absorb pessimistic-case Month 1–6 cash drawdown |
| Pre-opening & marketing | 280 000 | 6.1% | Brand, voucher booklet, opening campaign, training |
| Technology & POS | 220 000 | 4.8% | Hardware capex; subscription captured in opex |
| Contingency reserve | 200 000 | 4.3% | 5.9% of capex; releases against board approval |
| Total Capital Required | 4 600 000 | 100.0% | Covers all start-up needs to operating break-even |
Table 31. Detailed use of proceeds
12.3 Sources of Funding
The proposed funding structure blends equity and debt to optimise
after-tax cost of capital while preserving sufficient covenant headroom
and retaining founder ownership at majority level. The capital stack has
been pre-validated against the credit policies of two senior lenders
(one commercial bank and one development finance institution) and the
investment criteria of a shortlisted strategic equity partner.
| Source | Amount (R) | Instrument | Status |
|---|---|---|---|
| Founder equity | 1 500 000 | Ordinary shares (cash + capitalised expenses) | Committed |
| Strategic equity partner | 1 000 000 | 20% ordinary shares | Term sheet stage |
| Senior secured term loan | 1 700 000 | 5-year amortising; prime + 2.0% indicative | Application in progress |
| Asset finance facility | 400 000 | 5-year asset-backed loan | Approval in principle |
| Total Capital Stack | 4 600 000 | — | — |
Table 32. Capital stack summary
12.4 Investor Terms — Indicative
Indicative terms for the strategic equity partner are summarised
below. Terms have been designed to balance founder retention of
operational control with appropriate investor protections and clear
visibility on returns.
| Term | Detail |
|---|---|
| Investment amount | R1 000 000 in exchange for 20% ordinary shares (post-money) |
| Pre-money valuation | R4.0 million |
| Post-money valuation | R5.0 million |
| Board seat | One non-executive director appointment for as long as the investor holds ≥10% |
| Reserved matters | Standard minority protections (issuance of new shares, asset disposals >R500k, related-party transactions) |
| Information rights | Monthly management accounts, quarterly board pack, annual audited financials |
| Dividend policy | No dividends in Years 1–2; 30% of NPAT distributable from Year 3 |
| Exit alignment | Tag-along, drag-along; pre-emptive rights on transfer; mutual agreement on Year-5+ exit pathway |
Table 33. Indicative strategic-partner investment terms
Confidential — this business plan is provided to prospective investors and lenders for evaluation purposes only and may not be reproduced or distributed without the written consent of Khula Retail (Pty) Ltd.